In today’s briefing:
- 7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
- Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
- KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations
- LG CNS IPO: Limited Float Pushes Back Passive Buying
- ECM Weekly (22nd Dec 2024) – LG CNS, Kioxia, Vishal Mega, IGI, Sai Life, Ventive, Paras
- Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st
- Micron. So Long Legacy & Hello There HBM, Data Center & Leading Edge
- Matsuya Targets ¥20 Billion Online
- Korea: Potential Relegations from K League 1
- Vietnam Rubber Group (VRG) Showcases Its EUDR Preparedness At Annual Rubber Conference
7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
- Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
- Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up.
- An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.
Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
- Today, along with the announcement of Memorandum of Understanding between Honda Motor (7267 JP), and Nissan Motor (7201 JP) to work towards negotiating a Joint Holding Company by June 2025…
- Honda cancelled their existing ¥100bn buyback, and initiated a truly mammoth NEW Buyback – up to 1.1 billion shares (23.7% of TSO), spending up to ¥1.1trln on market through Dec-2025.
- Assuming the stock pops, it is probably “only” worth 15-18%, but that’s still a LOT. At that rate it boosts BVPS by 8+% on its own, and EPS by 17%.
KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations
- The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
- A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
- Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.
LG CNS IPO: Limited Float Pushes Back Passive Buying
- LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
- As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
- Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.
ECM Weekly (22nd Dec 2024) – LG CNS, Kioxia, Vishal Mega, IGI, Sai Life, Ventive, Paras
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, all of the India listings managed to do well, while Kioxia Holdings (285A JP) managed to provide steady returns as well.
- On the placements front, there were only a few deals in India, led by Mankind Pharma.
Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st
- Korea FSC announced on the 24th that the updated Capital Markets Act rules, approved by the Cabinet, will take effect on the 31st.
- Banning new shares to treasury stocks during spin-offs could shift board focus in Korea, reducing big shareholder influence and prioritizing the broader shareholder base.
- The capital markets law change could shift shareholder returns from buybacks to dividends, marking a key inflection point for traders, especially in Korea’s preferred stock market.
Micron. So Long Legacy & Hello There HBM, Data Center & Leading Edge
- Micron’s Q1F25 met expectations on key metrics but the ~9% downward guidance for the current quarter sent the share price into a tailspin
- Consumer-Related inventory issues and China competition were highlighted as the root causes for the surprise downward guide
- Micron is ok to cede legacy products to China competition and focus instead on the much more lucrative leading edge products, especially HBM. The transition could be rocky however
Matsuya Targets ¥20 Billion Online
- Department store sales to locals plummeted in October, resulting in the first decline in 32 months.
- While sluggish clothing sales was one factor, another was crowded luxury concessions putting off locals from visiting.
- Matsuya thinks it has the answer: keeping locals and tourists separate using a new online store.
Korea: Potential Relegations from K League 1
- There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.
- There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.
- Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.
Vietnam Rubber Group (VRG) Showcases Its EUDR Preparedness At Annual Rubber Conference
- 40-45% of production forest areas in Vietnam certified for sustainable management
- VRG sold over 800 tons EUDR rubber netting an additional US$250/ton
- Member firms abroad readying to sign contracts on EUDR rubber
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
